Computer Industry California

NEC Corp. said its unprofitable U.S. unit, Packard Bell NEC Inc. of Sacramento, lost more money than expected in April and May. That could prompt the Japanese computer maker to sell or close the unit, or "merge it with our other U.S. subsidiaries," NEC President Kouji Nishigaki said. Packard Bell's performance has been sliding since April because of intensified PC price competition in the U.S.

Three years after finding itself on the brink of bankruptcy, Merisel may finally be on the road to sustained profitability. The El Segundo company is one of the country's largest distributors of computer hardware and software, with 25,000 products in its portfolio. It ranks 343rd on the Fortune 500 list with $4.6 billion in sales last year, although profit remains small.

Editor's note: This is the first in an occasional series of articles examining the origins of the California dream and its contemporary possibilities. * California was born here on a morning in winter in the cold, fast water of the American River's South Fork. Nativity occurred, quick as a glimpse, at a bend in the river between Dutch and Indian creeks, below the scrub pines of Murphy Mountain.

Grass Valley was one of the richest towns of the California Gold Rush, and one of the noisiest. Its unrivaled gold output had to be pounded out of solid rock by stamp mills that rattled the surrounding hills like a symphony of wrecking balls. Today Grass Valley is as quiet as rustling pine needles. But while many other Gold Rush towns have withered, it continues to thrive, largely because its mines and stamp mills have given way to an unlikely concentration of high-tech companies.

A news release Thursday sparked speculation that Goldmine Software Corp., the fast-growing Pacific Palisades software maker, will announce April 19 that it is planning a merger or first-time stock offering. Speculation stemmed from a release the privately held company issued to the media saying that it planned a "major industry announcement" at the upcoming DCI Customer Relations Management Show in San Francisco.

Intel Corp. said Thursday that it would acquire Level One Communications Inc., a leading maker of microprocessors for high-speed communications, in a stock-swap valued at about $2.2 billion. The acquisition would give Intel a foothold in a new arena--supplying the silicon chips for equipment that manages Internet and intranet traffic.

Autodesk, a San Rafael-based maker of engineering and design software, said it will further cut its purchase price for Discreet Logic of Montreal to about $444 million in stock, down 16% from the initial offer. The news came as Discreet Logic, a maker of film and TV special effects, warned that it expects to report nearly break-even fiscal second-quarter results. That's well below the expected 15-cent profit. On Nasdaq, Discreet Logic shares fell $5.38 to close at $14.

Economists are forecasting that despite a probable slowdown nationally, two booming industries will give California a big lift in 1999--creating tens of thousands of jobs, blunting the ongoing effects from Asia and keeping the state's expansion well ahead of the rest of the nation. Analysts say these two robust, well-paying industries--construction and computer software and services--could be the difference between California having a so-so year or a decidedly good year.